The U.K. is preparing to tighten the net around hidden crypto profits, setting the stage for a sweeping tax enforcement regime that will rely on detailed trading data collected directly from cryptocurrency exchanges.
UK Sets Start Date for Mandatory Transaction Tracking
Beginning January 1, 2026, crypto exchanges operating in the country must start gathering complete transaction histories for all their U.K. users. The requirement covers how much customers pay for digital assets, the amounts they sell for, and any profit or loss.
HM Revenue & Customs (HMRC) will receive that information in 2027. Exchanges classified as “Reporting Crypto asset Service Providers” will send the data without exception. The tax authority will then compare the records to individual self-assessment filings.
"UK reporting Cryptoasset Service Providers will be required to report on their UK tax resident customers under the Cryptoasset Reporting Framework. Information for first reports to HMRC will be collected from 1 January 2026 and reported to HMRC in 2027," HM Treasury mentioned.
Tax specialists say the timeline gives traders until the end of 2026 to ensure their filings match their actual transaction history. HMRC has warned it will sanction platforms that fail to gather the required information, as well as pursue individuals who underreport their gains.
The government confirmed the plan in its 2025 Budget, describing it as part of a broader clampdown on tax avoidance. From 2027, HMRC will receive crypto trading data automatically for the first time, removing the uncertainty that has long surrounded digital asset taxation.
Read more: UK Crypto Firms Will Need to Collect Every Customer's Address, Tax Number from 2026
The rules align the U.K. with the OECD’s Crypto-Asset Reporting Framework. This global initiative aims to standardize how governments track digital asset activity. The framework is already underway in the European Union, Canada, Australia, Japan, and South Korea.
Budget Also Tweaks Economic Crime Levy Bands
Alongside the crypto measures, the Budget outlined changes to the economic crime levy starting April 1, 2026. The former “large” revenue band of £36 million to £1 billion will split into two tiers: £36 million to £500 million and £500 million to £1 billion.
Charges remain set at 0.1% of revenue for firms at the lower end of each band. The government also committed over £1.5 billion to youth employment and skills programs, including the Youth Guarantee, which promises education or job support for people aged 16 to 24.
The Budget document further stated that visa system reforms will ensure U.K. businesses can access global talent as the economy adapts to new regulatory and technological developments.
This article was written by Jared Kirui at www.financemagnates.com.
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